"As a developer, we're heavily relying right now on Unreal Engine 4," Suda told us. "That works really well with both systems – or in the sense that we could go either way."
Grasshopper recently revealed it has a stylistic action game in development that isn't Killer is Dead - and it isn't No More Heroes 3 either. As Suda told Siliconera back in April, it's a new game coming to one or more consoles. He also teased to Siliconera the game was either running on Unreal Engine 3 or Unreal Engine 4, adding that if he said which one then "you would know about the platforms."
Suda told Joystiq we can expect Unreal Engine 4 in Grasshopper games "if it's a big title, or if it's suited to that title," all of which suggests a next-gen landing for said secretive game.
As for the future possibility of No More Heroes 3, Suda told us, "Travis [Touchdown] is one of the characters I'm really fond of, that means a lot to me. So if there was the opportunity to create another sequel then yeah, I'm always up to the idea."